On Tuesday, the International Monetary Fund ripped this year’s economic growth forecast for Asia. The IMF warned Asia about risks by a fresh wave of COVID-19 infections, supply chain disruption, and inflation.
According to the reports, this year China’s economy will see a growth of 8% and 5.6% in 2022. However, the recovery will remain “unbalanced” as fiscal tightening and repeated outbreaks of the coronavirus weigh on consumption. In its report, the IMF stated that any “untimely policy normalization or misconstrued communication from the United States Federal Reserve could lead to higher borrowing costs and significant capital outflows from Asian emerging economies.
A cut of 6.5% in this year’s economic growth for Asia was forecasted by the regional outlook report. It is 1.1% down from April’s projection due to a spike in Delta variant cases hit consumption and factory output. For 2022, IMF raised the growth forecast to 5.7% from 5.3% of April’s estimate in response to vaccination drives.
A growth of 9.5% is expected to be seen for India while economies like Australia, South Korea, New Zealand, and Taiwan benefit from the high-tech and commodity boom.